The Obama administration’s top housing official is finding himself in hot water on Capitol Hill amid mounting concerns that the Federal Housing Administration is on the verge of a taxpayer bailout.

Housing and Urban Development Secretary Shaun Donovan’s appearance before the House Financial Services Committee on Thursday came after an independent audit warned last month that the agency could soon run out of money and require a taxpayer bailout. Mr. Donovan said the agency’s finances are of concern, but highlighted the study’s finding that the agency’s reserves are likely to recover and reach the 2% threshold in 2014, earlier than projected a year ago.

“While we all have been through the second-worst housing downturn in the history of the country, FHA, unlike many other institutions, retains a positive fund balance and the current book of business is strong,” he said. He added, however, that “we need to take further steps to protect the taxpayer and we will continue to do that.” Read More »

House Republicans who want to abolish Fannie Mae and Freddie Mac may be finding themselves outmaneuvered by colleagues—and the real-estate industry—who prefer a permanent government presence in the mortgage market.

As a House subcommittee took up six bite-sized bills to chip away at Fannie and Freddie’s market presence on Tuesday, Republicans said that they were unlikely to put forward a comprehensive overhaul bill and faulted the White House for not offering more direction. “We would like a comprehensive bill,” said Rep. Spencher Bachus (R., Ala.), who chairs the financial services committee. “Now, can we get a comprehensive bill? I don’t know. I don’t think so.” Read More »